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UK chip designer Arm has dismissed fears that its $40 billion acquisition by American chip giant Nvidia could expose it to heightened security scrutiny by the US government.
Arm’s cofounder Hermann Hauser, who is no longer involved with the company, on Monday described the deal as a disaster. He said the Committee on Foreign Investment in the US, or CFIUS, could now potentially dictate how and where companies that use Arm’s technology export their own products. Arm’s customers include Apple, Qualcomm, and Samsung.
But Arm CEO Simon Segars said the company had considered the prospect of heightened scrutiny, and concluded it would mostly be unaffected.
Nvidia announced on Monday it would buy Arm from its current parent SoftBank, in a deal that would create a giant of the semiconductor industry. The acquisition could take more than a year to complete, Nvidia founder Jensen Huang said.
Hauser voiced his concerns about CFIUS, the government body whose wide-ranging remit allows it to investigate business deals involving US firms and foreign entities, to the Today programme on Monday. “[That] means that if hundreds of UK companies that incorporate ARM’s [technology] in their products, want to sell it, and export it to anywhere in the world including China — which is a major market — the decision on whether they will be allowed to export it will be made in the White House and not in Downing Street.”
But Segars said that because the “majority” of Arm’s products are designed outside the US, they don’t fall under US export controls. “So that’s something that we pay very, very careful attention to because we absolutely have to adhere to all the laws that surround the export of products. Our analysis of that and how our products are affected won’t change by having a US parent company.”
Segars added that export constraints are rooted in where products are designed, not who their ultimate parent company is. “It isn’t to do with the ownership of the company, it’s all to do with the analysis of the product itself,” he said.
Deal creates anxiety in UK
While the Arm-Nvidia deal will, if it passes regulatory scrutiny over the next year, create a powerhouse in the chip industry, it has created some anxiety in the UK.
Arm, as a global technology company whose clients include giants such as Apple, is considered a jewel of the UK tech scene. A sale may weaken the UK’s position in tech, and the BBC reported that leading figures in the UK tech scene have lobbied the prime minister, Boris Johnson, to intervene.
When SoftBank acquired Arm in 2016, it committed to keeping Arm’s headquarters in the UK and promised to double headcount within five years. Nvidia’s Jensen Huang said he was open to similar discussions with the UK government. The company has said Arm would stay headquartered in Cambridge and that it will create an AI lab in the UK, but does not appear to have committed to specific staffing numbers.
“We’re open-minded to create a constructive framework that reflects our …read more
Source:: Business Insider